Lo1-1: Analyze the process for making personal financial decisions. What is Personal Financial Planning?

The Financial System and

Economic Factors 1

The financial system and daily economic activities influence personal financial decisions.

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The Financial System and

Economic Factors 2

Economics is the study of how wealth is created

and distributed.

• Forces of supply and demand on setting prices.
• The economic environment includes various institutions.

• Federal Reserve Bank has significant economic

responsibility.

Global Influences

Global economy influences personal finance.

American companies compete against foreign

companies for US dollars. Balance of exports and imports.

Foreign investments and their role in the US money supply.

A trade deficit also affects the value of a nation’s money and the cost of items being purchased by consumers.